HK ISLAMIC INDEX publishes comprehensive index rules and calculation methodology
to support all constituents. They are maintained by HK ISLAMIC INDEX Committees and any changes are widely publicized.

By using these index rules, you can predict how
HK Islamic Index will deal with corporate actions and other
changes to the index. This ensures HK Islamic Index transparency
and keeps down the cost of managing funds and products based on
it.

ReviewsThe index will be reviewed monthly for any potential additions
and/or removals. Full Semi-annual rebalancing will only occur
whenever the number of constituents falls below 78.

Quarterly rebalancing will be effective on the last business day of each
quarter ending March, June, September, and December.

Intra-quarterly
changes resulting from a rebalancing will be effective after the
close of the last business day of the month.

The number of additions will be determined by the number needed to bring the list of index
members back up to 78. In the case when the number of constituents
remains at 78 no rebalancing will be necessary.

Announcement of
the new inclusions and/or deletions will be announced to clients
at least two-to-ten days prior to implementation.

Changes

Index
Action

Corporate
Action Adjustment made to index

Divisor Adjustment

Spin-Off

No weight change. The price is adjusted to the
Price of the Parent Company minus (Price of Spinoff
company/Share Exchange Ratio). Index Shares
change so that the company’s weight remains the
same as its weight before the spin-off.

No

Rights Offering

The price is adjusted to the Price before the rights
issuance minus (Price of the Rights
(Offering/Rights Ratio). Index Shares change so
that the company’s weight remains the same as its
weight before the rights offering

No

Stock Split

Index Shares are multiplied by and price is divided
by the split factor.

No

Share Issuance or
Reduction

None

No

Special Dividends

Price of the stock making the special dividend
payment is reduced by the per-share special
dividend amount after the close of trading on the
day before ex-date.

Yes

Delisting

The stock is removed. No replacements are made
unless the number of constituents threatens to drop
to less than 75. An announcement will be made to
all clients beforehand.

Yes

Merger or
Acquisition

If the surviving company is already an index
member, it is retained in the index. If the surviving a removal
company does not or does not maintain the exchange
listing or is no longer Shariah compliant or fails to
attain Shariah Certification, it is removed.